North West businesses are being forced to put the brakes on growth plans, as nearly nine in ten companies admit difficulty in accessing capital is impacting their business.
According to BDO LLP’s bi-monthly Economic Economy survey of 500 mid-market businesses, nearly a third of regional companies are having to make redundancies or scale back the business, with more than a quarter struggling to repay loans or credit.
Meanwhile, 26% admit that a shortage of funding means they are unable to increase salaries as they’ve done in the past to cover promotions and annual reviews.
The survey by the accountancy and business advisory firm, also highlighted the ongoing challenges facing North West businesses. Over the next six months, supply chain disruption will continue to blight regional companies, with over a third saying delayed deliveries, stock shortages and cost increases are their number one concern.
As businesses in the region contend with a growing list of problems, investing in research and development, and new technologies is one of the top business priorities for more than a third of regional companies , with a further 32% also looking to improve cash flow or generate new sources of revenue, in a bid to tackle the disruptions being faced. In addition, more than a quarter intend to focus on upskilling and retaining their existing workforce, as North West companies look to take action over the next six months.
Ed Dwan, Regional Managing Partner at BDO in the North West, commented: “As a result of the tough economic conditions that continue to hamper regional businesses, companies are facing a real and immediate need to raise funds within the next 12 months, in order to kick-start their growth plans.
“Against a challenging backdrop, North West businesses are having to explore every option when it comes to raising additional finance, with many struggling to access the capital they need. For more than a third, the equity capital markets are the most appealing source of funding, with bank loans and venture capital also high up on the list.”
Mid-sized companies, which employ eight million people and provide around a quarter of UK jobs according to further research, are now calling on the Government to support them with rising costs and improve access to capital to make the UK a more appealing place to do business.
Dwan added: “So far, mid-market businesses in the North West have shown real grit and determination to fend off the challenges that continue to rain down on them.
“However, many are reaching tipping point. The need for greater capital is critical for a significant proportion of businesses, not just to finance growth plans, but also to address key issues such as investing in staff retention, repaying debts, improving salaries and, importantly, recruiting new employees with the right skills and experience.
“North West businesses cannot tackle these challenges in isolation. Business leaders in the region believe more can be done to address their concerns, to help to drive growth, and to ensure the UK remains an attractive place to do business.”
